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HMRC internal manual

Capital Gains Manual

Assets held on 6/4/65: charge under TCGA92 S178


Where a company ceases to be a member of a group of companies and, as a result, a chargeable asset acquired from another member of the group within the past six years is deemed to have been disposed of (and reacquired) immediately after the acquisition, the leaving company is chargeable under TCGA92/S178 or TCGA92/S179 see CG45400+. The time limit for making an election under TCGA92/SCH2/PARA17 should be treated as ending two years after the end of the accounting period in which the company leaves the group. A late election may be accepted if

  • the delay in making the election results from

    • events outside the taxpayer’s control, or
    • any other reasonable cause;


  • the election is made within three years of the end of the accounting period in which the Section 178 occasion occurred.

The acceptance of such a late election should be authorised by the Area Director Compliance or the Band B Compliance Team Leader in an Area Office. All other cases should be dealt with in accordance with CG13810.